Reiss: From 1970 until now <br />Reiss is known as a individual, sexyand stylish brand. <br />Reiss the brand Offers individual and aspirational look at affordable prices, successfully combining good design, quality and value. <br />Key values underpinning the brand’s image <br />creative, contemporary, essential, comfortable, affordable, directional<br />Established a reputation for good quality, fashion forward, price competitive offerings<br />Time line<br />Concept has proven itself, time to expandabroad. <br />
The vision of Reiss<br />The vision for the organizationEstablishing and developing the brand name Reiss internationally.<br />The mission With the local Chinese partner Booshing will the UK concept stores of Reiss adapt to the Chinese culture, a joint venture with Booshing will create the start for a larger franchise in Beijing China to penetrate this market. <br /> Aspirations The aspirations of this plan are becoming a well known quality brand within the Chinese market of Beijing<br />Chinese objectives- Open 3 stores with the joint venture and have these running at 100% after 4 years.Adapt the UK concept .- Open 6 franchise stores and have these up and running at 100% after 4 years.- Apply the marketing campaign “show your career” for 3 years.- Create top-of-mind awareness with 3% of the urban core (550.000 people).<br />Strategic intent Financial performance to ensure a long term growth of the Reiss brand. <br />Overall objectivesCreate a global brand name Reiss.25% increase of international sales and 8% internal rate of return. <br />
Market overview and situational analysis <br />Where are we currently?<br />Reiss is Currently still in the UK. There the concept has proven to be successful in both the men's wear as the women's wear. One of the possibilities to grow is to expand to Beijing. Beijing will be a raising city with raising economy in the future. There are many long term possibilities abroad. This will be an opportunity for Reiss to meet its objectives.<br />Review of what has been going well<br />The middle class is growing but also the spending power is growing. So people have more money to spend. But is it’s important to know, are they able to pay Reiss’ product for more than one time?<br /> Not only the extreme rich have money to buy clothes that provide more than just the basic need, warmth. The middle class are able to afford Reiss clothes and this group will expand. Reiss has the possibility, knowledge and the resources to take its share of this new and growing market<br />BEIJING AS THE NEW MARKET<br />With the strategy joint venture > Franchise <br />What has been going badly, in need of attention?<br />The fast growing market of Beijing should stay under constant survaillants. The economy is growing really quick. <br />The corrupted government , the culture and the currency should all be under constant research. Reiss needs a local partner to enter a new market. It is necessary to have the right network with the right partners. <br />Factors that have contributed to this<br />Branding– Introduce the brand in China, having a good name<br />Marketing – With the right marketing plans achieve the objective<br />The experience store - the stores in Beijng<br />
Internalanalysis and measuresof capability<br />++<br /><ul><li>Good quality products/services
Development brand life cycle (not established for now)
Introduction product life cycle </li></ul>(Chinese already know about high quality <br /><ul><li>and fashion brand)
- Large target</li></ul>Resource analysisMen: Manager/Staff/Security<br />Money: 3,6 million pounds for 3 stores in the first 3 years<br />Minutes: Objectives 3years (2013/14)<br />Opening 3 stores in 2011<br />1,5 year building brand<br />1,5 expand the name by franchising<br />--<br /><ul><li>High prices
No, distributor takes the risk, Reiss has no influence on the distributor</li></ul>Portfolio analysis<br />Reality checkNeeds and wants of middle class are changing. Reiss can fill this gap.<br />Reiss is capable to achieve this with the right resources.<br />With this, Reiss outforms his competitors. <br />Product and brand lifecycle positions<br />
Preliminaryassessment: strengths/weaknesses<br /><ul><li>Renewing and seasonal collection: never borded to see the same clothes
Start life cycle</li></ul>Thesestrengthsapply to the middle class in Beijing. <br />How to improve the weaknesses? Website : can help to see what do the shop proposeThe brand: not known in China, internet can help High prices : the middle class is growing and their spending power too.<br />
China’s huge consumer market <br />continues to become a magnet <br />for luxury European brands<br />Established brands in Beijing <br />Swarowsky<br /> Tiffany & Co<br /> Levi’s<br /> Louis Vuitton<br /> Zara<br />External analysis<br />++<br /><ul><li> Beijing = touristic city
customers has not perception of Reiss</li></li></ul><li>Preliminaryassessment: opportunities/threats<br />- Enough partners to work with<br /><ul><li> Growing of the spending power and the middle class
Enough space in China.</li></ul>- Permanent renew of collection<br />- Good known brand<br />- Quality of its products<br /> Critical Success Factors <br />Branding<br />Change/save the value proposition?<br />How to reach the Objectives <br />- US market is very important<br />- Be careful about imitation and fake<br />- Adapt to the culture, size, and colours<br />- Us market important<br />- High prices<br />- Middle class is fragile since the social securitysystem is far fromperfect.<br /> There are many opportunities with the right resources, threats have to be secured by research<br />
Critical issues analysis and positioning<br />Entry strategy for the next 3 years<br /><ul><li>Joint Venture
Hiring staff</li></ul>Bring the message: <br />“Show your career with Reiss”<br />Reiss’ products are higher than the average of market and it has a medium target, but we can conclude that Reiss is the best on its segment(Street fashion and Exclusively fashion)<br />
Principal assumptions underpinning the plan<br />CSF’s <br />Marketing <br />Get in touch with market<br />Branding<br />Value proposition<br />Life Cycle projections<br /><ul><li>Sales: Keeps on increasing. By decreasing, start new seasonal collection
Previous successful product is decreasing constant renewal of product life cycle
Profit/ Unit: If brand is more known, profit will increase. The more sold, the higher the profit.</li></ul>Probable customersmoves: <br />Follow the early adopters <br />Growing middle class<br />Fashion victimsStarting business people<br />competitor moves<br /> and developments<br />Competitors will react by new offers, special sales and price changes.<br />Quick market adaption and new advertisements on short term strategy<br />Big idea: “show your carreer with Reiss”<br />What should Reiss do in order to kill competitor?<br />High investments in the brand to create customer loyalty <br />
The target market and its characteristics<br /><ul><li>Urban core population of 18.54 million
Objectives: 3 joint venture stores+ 6 franchise stores/ 3% urban core / within 3 years
Young people are very influenced</li></ul> by fashion (15/24y)<br />- Young active person (25/34y)<br /><ul><li>Women buy more than men
Reiss fit more to women needs </li></ul> than men needs<br />- Targeting customers and consumers <br /> Target segmentation ( 3%)<br />Market segmentation of the <br />urban core,<br />divided in segmentations <br />
Preliminary market objectives<br />Profits forecast and sensitivity analysis<br />The Chinese market is evolving faster than the UK market.<br />Competitive stance and competitive advantage<br />The current market is people who are not aware of the brand Reiss. Reiss has to excel out of the others. By introducing the brand, it will attract the early adapters. <br />The competitive advantage is being an exclusive brand from the UK, unique brand because it is the first Reiss store in Beijing. This is attractive for early adapters.<br />
The positioning statement: Focus on target market<br />Reiss’ fashion is for young active, middle aged in China, focused in Beijing. <br />This target group wants/needs to spend more time, money on their appearance, the middle class is growing, so there is more money to spend. <br />The clothing piece (fashion) is a luxury good, a must have for every young professional.<br />That provides individual, stylishand sexy properties and shows your career success.<br />Product by Kotler<br />The possible competitors for Reiss are: Levi’s, Louis Vuitton, Zara, Calvin Klein, Polo Ralph Lauren<br />
Marketing and competitive strategy and the competitive stance<br />Competitive targets and prioritiesexcel in all the other competitors. Being unique. <br />Type of strategyFirst 18 months: Start 3 joint venture stores with a local partner. Adapt the experience shop to the market of China<br />Next 18 months: go on with 6 franchising stores, sell the concept of the adapted experience shops to franchisees. <br />Issues of differentiation/ competitive stance:<br />The big idea:Show that you are successful by fashionable and luxury clothes <br />PAY OFF/ SLOGAN: SHOW YOUR CARREER<br />Breakpoint thinking Inventing a new market: dress for the moment – for every occasion a new Reiss piece<br />Marketing actions:Chinese Celebrity as the new face. Fashion showsBig store opening <br />3 things that would make a difference:<br />#1: Work together with Booshing<br />#2: Strategy: Start an experience shop to develop new target group<br />#3:Collaboration with a Chinese celebrity for campaign on long term to stay in the market <br /><ul><li>Gong Li, worlds famous Chinese movie star (crouching Tiger, Hidden Dragon)</li></li></ul><li>Implementation<br />- Provide the best service<br />- Reiss is a good and trustable brand<br />- Change clothes 15 days after buying it without washing it and show the bill.-Specialcustomer phone line <br />
Development of the brand in Beijng<br />Market mapping:<br />Possible places for development of the brand: Shopping malls, shopping street. In total there will be 3 stores in the centre of Beijing. <br />Competitor advantageFills the gap for the middle class<br />Selling propositionSelling individual, stylish and sexy clothes. <br />Show your career by wearing Reiss<br />For every occasion, dress for the moment!<br />The bases for differentiation and competitive advantages:<br />strong branding, being unique<br />Leveraging assets and strategy <br />The delivery of greater value: when the brand is familiar with the market group, China can expand to more stores. <br />Competitive advantage, selling proposition and brand values <br />
Budgets <br />Franchise contract<br />The franchise will be a hard franchise to keep control over the brand. This means that:<br />The initial fee of £ 50.000<br />Royalties of 5% of the gross revenue <br />Marketing fee of 10% of the gross revenue. <br /><ul><li>The share of the joint venture 52% to the Chinese partner and for 48% for Reiss.
UK stores make £ 20.000.000 in sales with 25 stores. This is £ 800.000 per store. The assumption is that the joint venture and franchise stores will run up to 20% in the first year, 50% in de second, 90% in the third and 100% after this period.
Joint venture opens 3 stores in the first year.
The franchise opens 6 stores after 18 months.</li></ul>Risk management<br /><ul><li>The Chinese Yuan will rise in comparison to the UK Pound because of the growing economy of China and that the Chinese government has kept the Yuan low.
This trend will be combined with 50% hedging of the money earned in China. Funds will be transferred to the UK when the currency is high for the Yuan so Reiss gets more Pounds. To apply risk management, the other 50% will be transferred every quarter.
More risk management contains factoring by an UK bank from the franchise companies. This is done because Reiss gets the receivables right away and is able to reinvest and focus on their core competence, fashion. An irrevocable letter of credit will be used for transactions. The Chinese partner will make sure all the paperwork is correct with the bank.</li></ul>Investment<br /><ul><li>An investment of £ 2.5 million is needed per store.
£ 7.5 mil/100% X 48% = 3.6 million </li></ul> for 3 stores in Beijing.<br /><ul><li>This investment covers promotional activities, store costs, store development, franchise developments and overhead. </li></li></ul><li>Review<br />Are the objectives reachable?<br />25% increase of international sales, £ 5.220.750<br />The franchise will generate £ 6 million in sales revenues the first three years. This is reachable because Reiss will not enter a red ocean with killing competition but a blue ocean where market share is available with the growing middle class. <br />Have al stores up and running in four years.<br />The marketing idea of showing your career will make sure that Reiss sticks out in the market overflowing with people how have more money than ever before. The farmers have found a better paying job and have the culture of showing your money.<br />3% of the urban core (550.000 people)<br />This culture of showing what you have is an important assumption for Reiss. This is the basis of the marketing plan and essential for the success of the 9 stores. The cultures needs to be open for the UK clothes and Reiss needs to be open to adapt the clothes to the culture. The profit will be generated by meeting in the middle.<br />
Action Plan<br /><ul><li>Internet like social </li></ul>and specialized website <br />(Part 25%)<br /> Television during entertaining show (Part 15%)<br />Print campaign(Part 35%)<br />Sponsoring :<br />fashion show<br />or special event(8%)<br /><ul><li>Shop promotion </li></ul>(7 %)<br />
Implementation and control<br /><ul><li>The three concept stores will be managed by a UK manager and a Chinese manager to convert the UK style to a more local concept. Adapting the UK experience store concept to the Chinese shopping culture.
A local partner will do market research to provide valuable information for the adaption process. Which clothing lines work and which not?
Actively creating a Chinese business network for potential franchise partners and to avoid problems with corrupt authorities. Increase market coverage by using the established network to franchise.
Creating strong guidelines for franchise shops to market the brand name Reiss. Reiss will control 90% of the stores products price and design.
To increase efficiency, standardization of the concept will be used for the franchisers.</li></ul>All these things combined give Reiss high control.<br />